Friday, November 07, 2008

Objectivism & Economics, Part 7

Greenspan’s breaking away from Objectivism. In his autobiography, The Age of Turbulence, Greenspan explains why he stopped being an orthodox acolyte of Rand’s Objectivist philosophy:

Like any new convert, I tended to frame the concepts [of Rand’s philosophy] in their starkest, simplest terms. Most everyone sees the simple outline of an idea before complexity and qualification set in…. It was only as contradictions inherent in my new notions began to emerge that the fervor receded.

One such contradiction I found particularly enlightening. According to the objectivist precepts, taxation was immoral because it allowed for government appropriation of private property by force. Yet if taxation was wrong, how could you reliably finance the essential functions of government, including the protection of individuals’ rights through police power? The Randian answer, that those who rationally saw the need for government would contribute voluntarily, was inadequate. People have free will; suppose they refused?…

I still found the broader philosophy of unfettered market competition compelling, as I do to this day, but I reluctantly began to realize that if there were qualifications to my intellectual edifice, I couldn’t argue that others should readily accept it. By the time I joined Richard Nixon’s campaign for the presidency in 1968, I had long since decided to engage in efforts to advance free-market capitalism as an insider, rather than as a critical pamphleteer.

Greenspan here admits what has been suspected for some time: that he came to believe that Objectivism was flawed and so ceased being an orthodox advocate of Rand’s philosophy. More interesting is his decision to advance free-market capitalism “as an insider, rather than as a critical pamphleteer.” This is really where Greenspan most differentiates himself from his former Objectivist comrades. Objectivists want to change the system without being part of it. Hence their conviction that social change can be brought about through philosophical patter.

But what is the real reason why Objectivists shrink from attempting to make change through action rather than merely talking about it? I can think of two main reasons:

1. Most Objectivists don’t have the ability to make change as an insider. While this lack of ability may be rationalized as an unwillingness to compromise (which all insiders must do), let’s not be naive: if every advocate of the free market adopted the attitude of “I will never compromise, therefore I won’t ever become an insider,” all this would accomplish is to surrender the political realm to advocates of various anti-market nostrums. Greenspan became an insider because he had the political chops to do so. Few people who came under Rand’s orbit have comparable chops.

2. Trying to change things as an insider as risky: one is inevitably competing against people who want to change things in a different direction, and it’s quite possible they will win out. Just look what’s happened with Greenspan: from our current vantage point, his attempts to advocate free market capitalism as an insider do not appear altogether successful. But is that any reason for not trying at all? Either one is willing to fight for one’s ideals on the political stage, or one isn’t. Those who are capable of fighting on political stage but choose not to are cowards—plain and simple.

Objectivists are now frantically trying to rid themselves of the taint of Greenspan’s former association with Rand. Yaron Brook and Alex Epstein have accused Greenspan of being “the voice of government central-planning”—another instance of Objectivists discrediting themselves by over-stating their case. They do nothing but talk and scribble—while attacking the one of the few individuals influenced by Rand who actually had the courage and the capability of trying to affect change within the political realm. Where are such people going to come from if they know ahead of time how they are to be treated if they fail? The hysterical denunciations of Greenspan demonstrate once again why Objectivism will never succeed as an agent of political change.

22 comments:

I love it.------------------------------------------------------------------------

The tug in this segment is: Objectivists are afraid to work for change from within. They'd rather just stand around and write pamphlets. They are rigid. They are frigid. They don't have the ability to fight in the trenches or are afraid to risk 'the other side winning'. Bizarrely this throws an aura of either approving or disapproving admiration on Greenspan necessarily, all in the interest of finding some remote, convoluted thing to criticize in Ayn Rand.

But what does our infighting hero need to do in order to carry on? Compromise.

Yet......this blog and the hysterical gloating progressive blogosphere (which is doing the frantic shouting, as contrasted with the calm counter annihilation of the charge being carried out by Objectivists) insist that a non-compromising totalizing consistency in Greenspan's behavior caused the implosion. Never mind that they could have said: 'well, yeah he is sort of a little once was kind of an Objectivist, but his collectivist controlling beliefs and czarist behaviors were way more dominant. After all, he compromised.' But no, the charge is straight Rand. The Rand in him did it.

A rather disgusting example of having one's cake and spitting it out too.

Moreover there is further admiration that Greenspan "had the courage and the capability of trying to affect change within the political realm." You mean, he is quiet hero in the battle to effect Objectivism [not that there is necessarily anything good in that], worn down in the trenches, betrayed by the flaw in the philosophy due to the fact that Rand did not understand "Human Nature?"

Naturally, my worst excoriating contempt is for Greenspan. There is nothing -- nothing -- to admire in this wreckage of a person. Up the ladder from that would be things like the admiration shown him by this blog in this post.

Someone forgot to tell Greenspan about the housing bill passed by President Clinton which forced private banks to make subprime loans. If those loans weren't in the market, there wouldn't have been a housing bubble, and Residential Mortgage-backed Securities would have been the engine of Capitalism for the next three decades, until a still more powerful economic instrument was invented.

Those who are capable of fighting on political stage but choose not to are cowards—plain and simple.

I don't think that's true at all. Politics is a life-consuming arena. There are no "weekend" politicians, at least not high-level politicians with power to change anything. Succeeding in politics generally means not succeeding in:

Are there people in each of these fields who passionately believe in freedom? Sure. I am one of them. Speaking for myself, I can tell you the reason I wont spend my life fighting for freedom in the political realm.

It wont matter. For every honest, ethical, freedom-loving politician, there are 10 or more sociopaths borderline-sociopaths who will spout socialism and class envy rhetoric. Those are generally the people who will get elected. It's hard to change something that's completely and thoroughly corrupt from the inside.

On the other hand, if we can educate people enough where they no longer fall for attractive socialist lies, we might see a day when those politicians stop getting elected.

Clarification: I realize that some politicians (like Mitt Romney) were successful businessmen and such at one point in time. But you typically have to give up what you were successful at before to be successful in politics.

Where are such people going to come from if they know ahead of time how they are to be treated if they fail?

Greenspan is being criticized because he blamed the crisis on free markets. Free markets did not cause the crisis because there is/was anything but a free market in housing, lending, and banking. They are some of the most regulated sectors of the economy.

From what I can see, this is following the typical "over-regulate the market then blame any problems on what vestiges of freedom were left in that market" formula that always gets invoked during economic problems.

On the other hand, if we can educate people enough where they no longer fall for attractive socialist lies, we might see a day when those politicians stop getting elected. - Jay___________________________________

Good luck! Skimm through Pareto's "Mind and Society", and you'll know it's a pipe dream.

___________________________________

Free markets did not cause the crisis because there is/was anything but a free market in housing, lending, and banking. - Jay___________________________________

The crisis in auto industry, is it due to free market or government regulation?

Where has anyone here said that? I've only criticized one aspect of Greenspan's failure, i.e., his belief that self-interest was enough to keep banks acting against shareholder interests. Since Greenspan claims that his view of human motivation were influenced by Rand, I have suggested for this influence was not for the best. I will detail in a later post where I believe Greenspan went wrong economically and what he can be blamed for and what he can't be blamed for. (One hint: Greenspan's economic errors have little if anything to do with Rand—nor are they caused by any alleged "collectivist controlling beliefs" either.)

John: "You mean, he is quiet hero in the battle to effect Objectivism [not that there is necessarily anything good in that], worn down in the trenches, betrayed by the flaw in the philosophy due to the fact that Rand did not understand 'Human Nature?'"

Again this entirely misses the point. In the first place, I thought if there is one thing John and I can agree on is that Greenspan is not an Objectivist (this post makes this point by actually quoting Greenspan to that effect!). I will detail in a future post what Greenspan's successes and failures were.

John: "But what does our infighting hero need to do in order to carry on? Compromise."

That is precisely the Objectivist position I am challenging. Free societies are subject to faction, because not everyone can agree. For this reason, public policy becomes impossible without compromise between the major factions. The Constitution itself is a product of compromise. Recall the infamous designation of negro slaves as three-fifths a person: a very bad clause, but necessary in order to create the Union and get the Constitution passed. Politics is the art the possible: it is about fighting, not for perfection, which is impossible, but for the best that can be accomplished in a given situation.

The only time, in politics, where you don't have to compromise is when either you have all the power or there's complete unanmity on an issue—and both conditions are very rare in a free society. The irony about Objectivism is they have no power and hardly anyone agrees with them—so they are hardly in a position to gain anything from not compromising.

Jay: "On the other hand, if we can educate people enough where they no longer fall for attractive socialist lies, we might see a day when those politicians stop getting elected."

You won't go very far trying to educate people. A great many people either (1) don't care about the ideology stuff, (2) are too busy earning a living to gain any real understanding of politics and economics, or (3) are not smart enough to understand such things. Attempts to educate people usually devolve into dumbed down propaganda for people who were inclined to agree with you in any case.

There has been a concerted effort to educate people to support freedom since at least the forties. Success came only when some really talented political leaders came to the forefront. If you really want to see how change is brought about, just examine the career of Margaret Thatcher. Claire Berlinksi has just written a new biography of Thatcher, There is No Alternative: Why Margaret Thatcher Matters. As the product description of the book puts it: "Great Britain in the 1970s appeared to be in terminal decline—ungovernable, an economic train wreck, and rapidly headed for global irrelevance. Three decades later, it is the richest and most influential country in Europe, and Margaret Thatcher is the reason. The preternaturally determined Thatcher rose from nothing, seized control of Britain’s Conservative party, and took a sledgehammer to the nation’s postwar socialist consensus. She proved that socialism could be reversed, inspiring a global free-market revolution. Simultaneously exploiting every politically useful aspect of her femininity and defying every conventional expectation of women in power, Thatcher crushed her enemies with a calculated ruthlessness that stunned the British public."

Mere talk (which is what "educating" amounts to) won't get it done. Thatcher didn't get elected because the British electorate had been educated to prefer freedom. She got elected in the first place because of the failures of previous governance and she was re-elected and strengthened in her power because her government won the Falklands' war. Talented people within the system are indispensible if you want to accomplish anything beyond making a bit of virtuous noise in the world.

I would like to read Mind and Society; unfortunately, it appears to be out of print. I'll have to keep my mind out for a used copy somewhere.

You're probably right about the difficulty in educating people. I guess for better or for worse my idealism is an unchangeable part of my personality. Best I can do is get into situations where my idealism helps or at least doesn't hurt. Politics is definitely not one of those situations.

Yes, Thatcher did compromise. She managed a great deal in terms of privatization and union busting, but could not push back the welfare state at all—interests there too entrenched, welfare programs too popular in the UK. So did Thatcher get exactly what she wanted? No, hardly: who ever does? But she fought hard to achieve what she did (which really is a great deal), and that's what counts.

The preternaturally determined Thatcher rose from nothing, seized control of Britain’s Conservative party, and

took a sledgehammer to the nation’s postwar socialist consensus. - Greg-----------------------------------She managed a great deal in terms of privatization and union busting,

but could not push back the welfare state at all—interests there too entrenched, welfare programs too popular in the UK. - Greg___________________________________

Does this mean then you believe welfare state/programs didn't qualify as a part of postwar Britain's socialist consensus?

___________________________________

So did Thatcher get exactly what she wanted? No, hardly: who ever does? But she fought hard to achieve what she did (which really is a great deal), and that's what counts.- Greg___________________________________

is featuring an article claiming that the obama government is trying to take over the auto industry.

This is clearly an example of their abuse of reason and their ideology at work.

The big three auto manufactures have gone to Washington begging for money so they can stay in business, yet the rantards can't understand how this can happen so they make up their own bullshit to cover it up.

I know this is off topic but I don't know how to contact you otherwise, so I hope you will read this and check it out and maybe use it to combat these psychopathic liars.

"The preternaturally determined Thatcher rose from nothing, seized control of Britain’s Conservative party, and

took a sledgehammer to the nation’s postwar socialist consensus. - Greg"

Yes, she did this by raising more in taxation than ever before and spending more than any previous government!Who can forget the Poll Tax that brought about her downfall *LOL*When she left office the unions were stronger than ever as they'd manage to secure a wage rise that was 11% higher in real terms in 1990 than it was in 1979.You know Greg, you should have checked these facts first, there was a massive gulf between her rhetoric and the reality. The woman actually said "the NHS is safe in my hands".

Are You A Rand Cultist, Or Just A Fan? Take This Simple Test To Find Out.

what they"re saying about the ARCHNblog:

"This wonderful blog chronicles exactly why and to what extent Ayn Rand was horribly incorrect on a number of issues. This is for the fence-sitting and fanatic but otherwise intelligent Objectivist alike. If the latter even exists. Highly recommended, but come prepared with your Rand collection..." - Commerican at Stumbleupon